Good morning and welcome to our rolling coverage of the world economy, the financial markets and business. The main European markets finished lower yesterday while Wall Street had a bullish day, after the much better-than-expected US jobs report on Friday added to growing economic optimism. The tech-heavy Nasdaq set a new record close, up 1.1%
Good morning and welcome to our rolling coverage of the world economy, the financial markets and business.
The main European markets finished lower yesterday while Wall Street had a bullish day, after the much better-than-expected US jobs report on Friday added to growing economic optimism.
The tech-heavy Nasdaq set a new record close, up 1.1% to 9,924.74, the Dow Jones rose 1.7% and the S&P 500 index gained 1.2%. The S&P 500 is now slightly ahead for the year.
In Asia, the Australian stock market jumped 2.4% (it was closed yesterday), Hong Kong’s Hang Seng climbed 1.77% and China’s CSI 300 gained 0.48%. Japan’s Nikkei bucked the trend, falling 0.38%. Asian stocks, as measured by MSCI’s broadest index of Asia-Pacific shares outside Japan, rose for the ninth session in a row, adding 0.28%.
Stock futures are pointing to a higher open in Europe.
Last night Jerome Powell, the head of the US Federal Reserve, set out the strategy for the Main Street Lending facility that will provide loans to small and medium-sized firms, noted David Madden, market analyst at CMC Markets UK. He said the scheme is “days away” from issuing its first loans. The minimum loan size has halved to $250,000, while the maximum loan size might be set at $300m, higher than $200m previously. The repayment period has been extended to five years from four.
Oil prices fell by over 3% yesterday reversing earlier gains when it emerged that Saudi Arabia, the United Arab Emirates and Kuwait will not be committing to any extra production cuts, after the Opec oil cartel and its allies extended previous deep production cuts into July. Oil is up again this morning: Brent crude is trading 0.76% higher at $41.11 a barrel while US light crude is 1.1% ahead at $38.61.
German trade data for April this morning were grim, with a 24% monthly slump in exports in April, at the height of the coronavirus crisis. Germany’s trade surplus shrank much more than expected, to €3.2bn from €12.8bn in March, as imports dropped less than exports, by 16.5%.
European Central Bank president Christine Lagarde defended the central bank’s enormous stimulus package yesterday before the European parliament’s economic and monetary affairs committee. Madden says:
The central banker was under attack from some EU lawmakers who fear for the rising debt levels of many eurozone nations. Ms Lagarde claimed the colossal stimulus package was proportionate to the size of the crisis facing the currency bloc. The update was a fine example of the ECB’s willingness to keep the show on the road at all costs.
- 9:30am BST: Bank of England/FCA mortgage lending for Q1
- 9:30am BST: UK Treasury committee hearing on Covid-19 economic impact with Resolution Foundation, Institute for Fiscal Studies and Institute for Government
- 10am BST: Eurozone GDP final estimate for Q1 (forecast: -3.8% quarterly)
- 3:30pm BST: Jon Cunliffe speech at Investment Association